The Sovereign Fund of Egypt (TSFE) has signed up to explore options for a new 1.1 GW wind project, with ACWA Power, and a green hydrogen plan with AMEA Power.
TSFE and ACWA are to explore a wind project in the Gulf of Suez, under a memorandum of understanding signed on November 15.
TSFE may own up to 10% of the project. Current backers are Hassan Allam Holdings with 25% and ACWA. Oman Investment Authority recently signed a similar deal with ACWA on acquiring a 10% stake in the project.
TSFE CEO of infrastructure Karim Badr said the deal was a “significant manifestation to our strategy to continue to invest into renewable power generation to decarbonise Egypt’s energy sector and capitalise on green energy sources in the country”.
The sovereign fund also struck a deal to participate in the development of a 1 GW green hydrogen project. AMEA intends to launch front-end engineering and design (FEED) work in January 2023.
The company has already carried out a feasibility study on the plan. It aims to reach a final investment decision (FID) within 24-36 months.
AMEA said it would develop the plant in two 500 MW phases. The first phase should start up in 2027.
It will build the plant at Ain Sokhna. The company will process the hydrogen into green ammonia, with output of 800,000 tonnes per year.
“This project is the first of several large scale clean energy projects that AMEA Power will develop across the region as the company enters a new phase in its journey and begins to scale up operations across Africa,” said the company chairman Hussain Al Nowais.
The official went on to say the world was entering a “new era of clean energy deployment”. Options such as green hydrogen “will present huge opportunities for investment, job creation and countries like Egypt [will] become major hubs for clean energy”.
AMEA signed the deal on the sidelines of the COP27 event, currently under way in Egypt. In addition to TSFE, it also involves the Egyptian Electricity Transmission, the New and Renewable Energy Authority and the Suez Canal Economic Zone on the project.
The Sovereign Fund CEO Ayman Soliman said the agreement was a “major milestone” for Egypt’s plans.
“Egypt has put a tremendous effort in the development of its Green Hydrogen Programme and has made incredible progress reaching this stage in a matter of months,” he said. The project aligns with the fund’s decarbonisation strategy, he said. It will benefit the economy and position “Egypt as a regional green energy hub”.
AMEA is in talks with potential offtakers from Europe, China and Japan. It is seeking a long-term contract – and a number of hydrogen experts have noted the difficulty in securing these.
Egyptian Minister of Petroleum and Mineral Resources Tarek El Molla held talks today with European Commissioner for Energy Kadri Simson. The two talked about links between the two areas, running from gas supplies to the hydrogen partnership.